My market order to purchase 22 shares of MO executed at market open today for the price of $45.81. I updated the portfolio and summary by sector. Also, check out the portfolio’s performance to date. These exhibits will be updated periodically and will have more meaning as the portfolio grows.
This week’s pick is one of twelve Dividend Kings from the Consumer Staples sector. But of those twelve, only one other is trading below fair value and that’s Target [TGT]. As much as I love Target, especially at their current price, I am going with one that pays a massive 8.2% yield, highest amongst all Dividend Kings. In fact, on August 25, 2022, they announced their 57th dividend increase in the last 53 years. We want to remain defensive in this market, and this stock’s earnings were unphased in our last two recessions, climbing steadily year after year.
Monday morning, Altria Group Inc [MO] joins the Dividend King portfolio.
…There has been a lot of debate over the past few weeks. Investing experts have been taking sides, are we in a bear market rally or have we already found a market bottom and begun a new bull run? The answer is in. We enjoyed a rally within a bear market, and it’s over. That’s right, I’m calling it. Just as there are corrections within a longer running bull market, there are rallies within bear markets. In my post on August 9, 2022, entitled “Yield Curve Inversion”, I put forth my own opinion – that we were already in a recession. This afternoon reinforced that notion.
…After presenting five different methods for calculating beta in Excel, I used examples to demonstrate why beta should not be used to set expectations about future return. There are several reasons for this:
This past weekend I narrowed my choice for this week’s acquisition to two companies. National Fuel Gas Company [NFG] and Computer Services Inc. [CSVI]. The deciding factor turned out to be that NFG had been rising in price this year and CSVI had been struggling. I assumed CSVI would be either the same price next week or perhaps even lower. So, I decided to add NFG to the portfolio and add CSVI later.
NFG dropped about a dollar by close of today. CSVI went up 50%.
…My market order to purchase 14 shares of NFG executed at market open today for the price of $73.24. I updated the portfolio and summary by sector. Also, check out the portfolio’s performance to date. These exhibits will be updated periodically and will have more meaning as the portfolio grows.
Do you remember what you were doing on June 15, 2022? We should all remember. On that day, a company from Williamsville, New York, founded in 1902, announced an increase to their dividend. They have paid a dividend for 120 consecutive years and this increase is the 52nd consecutive annual increase in the dividend. Think about that. When they began paying a dividend, the U.S. was still minting the Indian Head penny.
This week’s Dividend King operates in four business segments, one of which is Utilities. I think this might be why they’ve been misclassified as a Utility stock on TD Ameritrade. Yahoo! Finance has them correctly labeled as an Energy company. Energy companies are notorious for inconsistent earnings, because their performance is sensitive to a host of economic factors that are out of their control. It very likely explains why there is only one Energy company in the list of Dividend Kings. Only one.
Monday morning, National Fuel Gas Company [NFG] joins the Dividend King portfolio.
…I thought it might be illustrative to look at two Dividend Kings with a nearly identical beta, but with very different average annual returns over the last five years (through July 2022): Lowe’s Companies Inc [LOW] and Stanley Black & Decker Inc [SWK].
Beta says both companies were 25% more volatile relative to the market, but Lowe’s vastly outperformed the market (the S&P 500 Index, indicated by the ticker GSPC) and Black & Decker grossly underperformed the market. Please take my word; including the effect of dividends, reinvested or not, would not have materially affected the magnitude of the performance difference in these two stocks. As we’ll see, there’s more to beta than meets the eye.
…My market order to purchase 7 shares of PPG executed at market open today for the price of $135.22. I updated the portfolio and summary by sector. Also, check out the portfolio’s performance to date. These exhibits will be updated periodically and will have more meaning as the portfolio grows.
What do the following numbers have in common? 139, 496, 51, 62. Give up? One hundred and thirty-nine years ago, in 1883(!), Pittsburgh Plate Glass was founded by Captain John B. Ford and John Pitcairn in Pittsburgh, Pennsylvania. In 1898, it began a streak of paying quarterly dividends that persists to this day, 496 quarters later. With their dividend increase in 1971, it began a streak of increasing the dividend payout annually. On July 21, 2022, they announced a three-cent increase to their 62 cents per share quarterly dividend, marking the 51st consecutive year of increasing their dividend.
Now known as PPG Industries, Inc [PPG], it is the largest paint and coatings company in the world, with 240+ manufacturing facilities in 59 countries and operations in 75 countries. The global headquarters is still in Pittsburgh. I missed the first 50 years of this streak, but I think it’s time to get in on the action.
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